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How AWS is growing its ASEAN footprint

Building ‘strong autonomous country teams’ has been a key focus for AWS in Southeast Asia where demand for cloud computing services is on the rise

Amazon Web Services (AWS) is doubling up on efforts to meet the growing demand for cloud services in Southeast Asia, even as its rivals continue to nip at its heels.

Speaking to regional media on the sidelines of AWS re:Invent 2019 in Las Vegas, Conor McNamara, the company’s newly minted managing director for ASEAN, said “we need to be very intentional on the supply side of the equation” to meet the huge appetite for cloud computing in the region.

From serving ASEAN customers solely out of Singapore in 2016, AWS has since opened seven offices in six countries across the region, each staffed with “strong autonomous country teams” spanning professional services, training, certification and enterprise support roles, according to McNamara.

Meanwhile, AWS is also investing in local partner ecosystems to help enterprises realise the benefits of cloud, along with training to beef up the region’s cloud capabilities through tie-ups with local universities and training providers such as NTUC LearningHub.

Asked about the challenges that lie ahead for AWS as it builds out its footprint in ASEAN, McNamara cited the need to stay true to the key things that had made the company successful – a strong operational focus and being customer obsessed.

“We've been doing this for 13 years now and we are operating at a scale that nobody else is, along with our global reach and appetite to invest in infrastructure,” McNamara said. “There are a lot of things in our favour, so going forward, it’s making sure that we stick to those principles.”

Besides luring startups to its services, AWS, like other public cloud suppliers, have been eyeing enterprise workloads that are increasingly being moved to the cloud. It has formed local migration teams, each specialised in enterprise workloads, such as SAP, enterprises databases, Windows and VMware.

“But they’re all mapped to one thing – helping customers reduce the cost and internal overheads associated with running legacy IT infrastructure,” McNamara said.

Although AWS has had a headstart as one of the first cloud suppliers to enter Southeast Asia with a Singapore datacentre in 2010, other cloud suppliers are catching up, particularly in Indonesia, the region’s largest economy with a vibrant start-up ecosystem and a fast-growing e-commerce market.

Alibaba Cloud currently operates two datacentres in Jakarta, and counts Indonesian customers including Tokopedia, GTech Digital Asia, Dwidaya Tour and Yogrt as customers. Google Cloud and AWS are also planning new cloud regions in the Indonesian capital.

In Vietnam, AWS is also shoring up its presence through local partners like VTI, a cloud implementation and software development firm that has worked with large enterprises including airlines and food manufacturers to migrate legacy applications to the cloud.

But being in a cost-sensitive market, most VTI customers only make use of AWS’s compute, storage and database services, rather than platform services such as machine learning, which are deemed by local firms to be more expensive than on-premise offerings and similar services from Google Cloud, VTI executives told Computer Weekly.

In response, McNamara said AWS “works relentlessly to take cost out of our own cost structure and to pass those savings back to our customers in the form of lower prices,” noting that the company has reduced prices 77 times since it was launched in 2006.

“With AWS, customers can easily right size services, leverage Reserved Instances, and use cost management tools to monitor costs. This allows customers to be on top of how much they are spending. The same approach applies to higher level services such as artificial intelligence and machine learning,” he added.

According to Tim Sheedy, principal analyst at Ecosystm, only half of businesses in ASEAN are using some type of public cloud service today, most of which are deployed in a hybrid cloud scenario.

The other half use private cloud in hosted datacentres or on-premise, which not only speaks to the conservative nature of companies in the region, but also to the opportunity for growth should a public cloud company crack the market, Sheedy said.

“The battle for cloud is in the traditional platforms,” Sheedy said. “If AWS can win these applications and platforms, then they position themselves for more innovative capabilities as businesses start to build more capabilities in public cloud environments – and take advantage of platform-as-a-service [PaaS] capabilities that ultimately provide businesses with the tools to make them innovative and agile.”

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